Did SEPHORA got their positioning wrong

Sephora is changing partner third time From Genesis to DLF to Arvind now. Did they got their positioning wrong and got the wrong partners or has the aspiration from market changing.

MUMBAI: Textile tycoon Sanjay Lalbhai-led Arvind is likely to take over the Indian operations of cosmetics and beauty retailer Sephora, owned by French luxury conglomerate LVMH Moet Hennessy Louis Vuitton, marking a new alignment in the country’s fast consolidating retail industry.

This will see the LVMH company ending ties with real estate major DLF, which manages Sephora currently through its retail arm DLF Brands, sources familiar with the matter said. LVMH has been scouting for a new partner and has most likely opted for Arvind Brands & Retail, a unit of Lalbhai’s $1-billion Arvind, the sources added.

Arvind and Sephora are finalizing a deal giving the former rights to manage operations of the cosmetic retailer in India, besides taking over the four existing stores in the National Capital Region and in Pune with Rs 100-crore revenue this fiscal.

Arvind is preparing a new plan for Sephora which would give it a much wider footprint of 50 stores in the near future, the sources said.

Sephora, which entered India three years ago, has already changed its India partner once earlier when it snapped ties with Delhi-based Genesis Colors in 2013. The cosmetic chain now wants to align with a partner who can help it build scale here.

LVMH is seeking stability in India after speeding up Sephora’s growth in China where it has opened 150 stores in the past decade.

When contacted by TOI, Arvind Brands & Retail’s CEO J Suresh declined to comment on speculation, while LVMH India’s group director Vispi Patel did not respond to calls and text messages. Dipak Agarwal, CEO of DLF Brands, also did not offer any comments.

Sephora wants to scoop up a bigger share in the country’s premium cosmetics and beauty market, estimated at $1 billion annually, but fragmented between department store chains. The global chain operates more than 1,700 stores across 30 countries with over $4 billion in revenues.

Arvind Brands & Retail has been adding heft with a string of deals giving it control over India rights of multiple international brands like Gap, Calvin Klein, Hanes, Nautica and Debenhams. It has projected a Rs 5,000-crore revenue in the next three years, up from Rs 2,200 crore reported last fiscal.

Arvind is likely to induct a new management team to steer Sephora, since its expertise is mostly in the apparel fashion and accessories business. Sources said Arvind and Sephora may also unveil an e-commerce play as online shopping is redefining consumer habits and expanding reach in the country.


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